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Turf wars and market control: competition and complexity in the market for legal services

2004; Taylor & Francis; Volume: 11; Issue: 1-2 Linguagem: Inglês

10.1080/0969595042000317451

1469-9257

Julian Webb,

Law, Economics, and Judicial Systems

Click to increase image sizeClick to decrease image size Acknowledgements My thanks to my colleagues John Flood and Andreas Philippopoulos-Mihalopoulos for their comments on an earlier draft of this paper, and to John Paterson for continuing to share his deep understanding of systems theory; responsibility for the ends to which I have used their comments and suggestions remains, of course, my own. Notes It is sometimes tempting to take a narrower view of closure than much of the sociological literature—including Abel's own—actually admits. Credentialing and control by formal boundary regulations are a feature of the mechanics of social closure, but closure is also reflected in the deployment and exploitation of a wide range of what we might term the professional group's cultural resources, or cultural capital. Social closure is thus reflected in the ways professionals (and particularly their representatives) deploy professional image, ethics and ‘respectability’, resources of knowledge and skill, even forms of language to create a distance or distinction between themselves and ‘outsiders’. This of itself goes a long way to explain and warrant Abel's method—evident in Abel (1988 Abel Richard 1988b The Legal Profession in England and Wales ( Oxford Blackwell ). [Google Scholar]b) and even more in his latest book—with its reliance on the detailed presentation and analysis of professional discourse. The impact of the restructuring of legal aid and the rise of conditional fees are discussed in later chapters. Today a number of them routinely appear among the top 10 firms in European countries such as France, Germany, the Netherlands and Spain. They have infiltrated Eastern Europe, Central Asia and the Far East and have expanded significantly at home in the process: in 1990 the top 20 English firms—primarily the big City firms who make up this international elite—employed 12.5% of all solicitors in private practice. By 2000, by my approximation, that proportion had risen to around 20%. It is, for example, one of the most open of open secrets that most commercial lawyers view the professional rules on conflicts of interest as almost unworkable in specialised, high value markets, where there is a limited pool of expertise, and will generally seek to work around them where possible—an approach that is increasingly likely to be legitimised by the new ‘Guide to Professional Conduct’ issuing from the Law Society's Regulation Review Working Party—see www.lawsoc.org for the latest consultation papers. C-309/99 Wouters v Algemene Raad van de Nederlandse Orde van Advocaten[2002] ECR I-21: see Flood (2002 Flood and John. 2002. NOvA (NoGo) or multi-disintegrating partnerships. Legal Ethics, 5: 9[Taylor & Francis Online] , [Google Scholar]). Though this is of course different from saying 71% were actually accredited as specialists. As an aside this in turn also seems to point to one of the most fundamental reasons why a ‘free’ market in legal services, in the radical neo-liberal sense, is a bad idea. An unregulated free market is open to market capture precisely because consumers may follow price rather than quality, in an unregulated ‘race to the bottom’. Quality regulation, I suggest, not just consumer access to information is, paradoxically almost, an important guarantor not just of quality, but also of competition! Note that Abel's view (1988b), that the independence of the English legal profession was by virtue of changing working practices in steep decline, has itself been criticised as too readily accepting professional ideology as a description of reality—see Sterett (1990 Sterett and Susan. 1990. Comparing legal professions. Law & Social Inquiry, 16: 363 [Google Scholar], p. 382). See also the Law Society's (2004) response to the Clementi Review, which rejects ‘model A’ external regulation on the basis that it constitutes “the most serious threat to the independence of the profession since it would open the door to direct involvement by the Government in regulation”. Though I consider this tendency least marked in Bourdieu's work, and this is perhaps no coincidence given that some interesting links in this regard exist between the theory I am about to expound and Bourdieu's work on the dynamic between ‘field’ and ‘habitus’: see, e.g. Dyke (1999 Dyke Chuck 1999 Bourdieuean dynamics: the American middle class self-constructs in: Richard Shusterman (Ed.) Bourdieu: A Critical Reader ( Oxford Blackwell ). [Google Scholar]). “A system is not a mechanical device to ensure closure and to control everything inside it. Rather a system is a highly precarious ‘dance’ of ensuring a distinction between the system and its environment …” (Baecker, 2001 Baecker and Dirk. 2001. Why systems. Theory, Culture & Society, 18: 59[Crossref], [Web of Science ®] , [Google Scholar], p. 63). In the language of complexity theory, the tendency is to talk of ‘tangled hierarchies’ or ‘strange loops’ in an attempt to describe the recursive and pluralistic processes of norm creation and validation that seem to shape social systems: cf. also Luhmann (1986 Luhmann and Niklas. 1986. L'unité du système juridique. Archives de philosophie du droit, 31: 174 [Google Scholar]). This amplification is well known through metaphorical examples such as the ‘butterfly effect’, though the metaphor is actually supported by mathematical modelling which shows that, as a pattern of bifurcations progresses, it takes consistently smaller changes in the value of a parameter to induce the next bifurcation. This ratio appears to be a mathematical constant (Byrne, 1998 Byrne David 1998 Complexity Theory and the Social Sciences ( London Routledge ). [Google Scholar], pp. 169–170). Indeed some theorists assert that the accumulation of internal complexity is itself only achievable through the operative closure of the system in relation to its environment (von Foerster, 1960 von Foerster Heinz 1960 On self-organising systems and their environments in: Marshall Yovits & Scott Cameron (Eds) Self-Organising Systems: Proceedings of an Interdisciplinary Conference 5 and 6 May 1959( Oxford ). [Google Scholar], cited in Luhmann, 2004 Luhmann Niklas 2004 Law as a Social System translated by Klaus A. Ziegert( Oxford Oxford University Press ). [Google Scholar], p. 81). This seems to me to be similar in effect to the operation that John Paterson describes as themetisation (see Paterson, 1995 Paterson and John. 1995. Who is Zenon Bankowski talking to? The person in the sight of autopoiesis. Ratio Juris, 8: 212 [Google Scholar], pp. 221–222). ‘Steering’ is the attempted reduction of a difference between systems. Insofar as it involves influences or perturbations from outside the system it is of course, as a strategy, unpredictable: the absence of external control and the necessity of all such influences being (re-)interpreted by the system ‘affected’ makes all steering effectively self-steering. For example, the manner in which an agent connects to the network, and communicates to other agents will reflect a range of socially differentiated relationships and strategic choices, and hence this is one ‘level’ at which power can re-enter the equation (cf. Paterson, 1995 Paterson and John. 1995. Who is Zenon Bankowski talking to? The person in the sight of autopoiesis. Ratio Juris, 8: 212 [Google Scholar], pp. 224–225). This in itself might, for example, help explain the decline of the profession's traditional collective authority and the ‘will to power’. I am conscious that even the use of the term control can make the process sound more designed and determined than is intended. I should acknowledge that this part of my analysis has been influenced significantly by Larsson's (2004) suggestive approach to analysing banking (de-)regulation in Sweden. Note Teubner's (2001, p. 41) observation that under extreme conditions of functional differentiation, the internal decision-making of a system is strained by polycontexturality. This idea is also captured by Larsson's (2003) characterisation of “polycontextuality” (sic) as a “clash of logics”. This is often characterised by notions of ‘responsive’ or co-regulation, which can be linked conceptually to the reflexive law models developed by writers such as Paterson and Teubner [see Teubner (1987 Teubner Gunther 1987 Autopoietic Law: A New Approach to Law and Society ( Berlin de Gruyter ). [Crossref] , [Google Scholar]), Paterson and Teubner (1998 Paterson, John, Teubner and Gunther. 1998. Changing maps: empirical legal autopoiesis. Social & Legal Studies, 7: 451[Crossref], [Web of Science ®] , [Google Scholar]); cf. Parker (1999 Parker Christine 1999 Just Lawyers ( Oxford Oxford University Press ). [Google Scholar]) and Webb and Nicolson (1999 Nicolson Donald Webb Julian 1999 Professional Legal Ethics: Critical Interrogations ( Oxford Oxford University Press ). [Google Scholar]) on responsive approaches to the regulation of the legal profession].